Assumption wrong

December 5, 2012

I with to take issue with Juniata College professor Randy Rosenberger's contention that: "If you increase the income taxes on wealthy people, they will lose their incentive to work" is false.

The reason it is false, Rosenberry continues, is that "We are motivated to work by more things than just money."

Just because motivation to work is affected by many things, it does not follow that higher income tax rates do not discourage work.

It is the job of the social scientist to apply the scientific method, discern the factors that do, and in what direction they behave.

In fact, the logical and statistical evidence is overwhelming that higher income tax rates, other things being equal, discourage the incentive to work and the incentive to take risk. Also, the way his statement is phrased confuses income and wealth.

Wealth is an accumulation of assets and income is what one receives in exchange for their time, effort and risk taking. All high income earners are not wealthy (because of expensive families or lifestyles) and all wealthy people do not have high taxable incomes (because they structure their income to avoid it).

All in all, the statement, the answer, and rationale are a poor application of the scientific method.

Perhaps Rosenberger could use some of his sabbatical time to brush up on it and the "ceteris paribus" (other things being equal) assumption in it.